The next generation of internet-connected game console revenues will increase from roughly $800 million in 2008 to nearly $2 billion in 2011, predicts JupiterResearch in its "US Console Games Forecast, 2006 to 2011" report. Increasing the value of each console household is the key to growth, Jupiter said, forecasting that console revenue growth will reach a high of $12.2 billion in 2007, when new platform sales will be the strongest.

In 2008, the battle for the living room will begin in earnest, Jupiter says, with one in ten households in the U.S. having a connected game console; that percentage is forecast to double by 2011.

"In 2008, more than 50 percent of US households will have broadband Internet access and nearly 35 percent will have a home network," said David Schatsky, president of JupiterKagan. "As the industry shifts to digital distribution especially for casual games and other content, it will attract an estimated 24 million households in the US to get connected. That will contribute to the revenue growth from $800 million to nearly $2 billion in 2011."